PRMA: Puerto Rico is open to serve as hub between the Americas, Europe and other points

Luis Muñoz Marín International Airport and Muñiz Air National Guard Base in Carolina, Puerto Rico (CB file)

Manufacturers Association seeks to educate key players for industry opportunity to take off

SAN JUAN – The Puerto Rico Manufacturers Association (PRMA) is leading an initiative to educate the local and international aviation industry as well as freight forwarders and manufacturers about the opportunities created by a recent order of the U.S. Department of Transportation (USDOT) regarding expanded flexibility in the transportation of cargo and passengers at Puerto Rico’s international airports, and the possibility of including Puerto Rico in the Stevens Amendment, the association’s president, Carlos Rodríguez, announced Thursday.

The Stevens amendment granted Alaska exceptions to cabotage prohibitions, allowing a cargo flight from a foreign carrier to stop in Alaska, transfer or consolidate cargo with domestic or other foreign carriers and continue to other U.S. airports.

“The current global situation of COVID-19 has brought with it enormous challenges for the airline industry worldwide. Given the geographic location and infrastructure of Puerto Rico, this provision may represent an opportunity for airlines to review current and some future operations, as this could be economically viable and at the same time could expand the scope of the airlines that are working on a collaborative transfer model between the Americas, Europe, the Middle East, the United States and other points, thereby facilitating higher cargo yields and…balance between destinations, with fewer planes,” Rodríguez said in a statement.

Through this order, (Order 2020-4-10) the United States Department of Transportation is finalizing its provisional conclusions and conclusions of Order 2020-2-12 and granting some general authority to foreign airlines to allow them to provide certain expanded cargo and passenger transfer services at Puerto Rico ‘s international airports.

The PRMA’s Transportation Committee, led by Tom Vincent, vice president of Prime Air Corp., and Jerónimo “Jerry” Léctora, consultant and expert in the aviation industry, has actively contacted the airlines that provide services to international markets, local manufacturers, airport operators and transportation entities, and local government officials to educate them about the opportunity.

It has scheduled a series of Zoom webinars targeting specific target groups:

“We are confident that this flexibility in the transportation of air cargo and passengers can improve Puerto Rico’s commercial opportunities in the international air cargo industry, making the island an important international cargo transfer center,” the PRMA’s president said.

No benefit from 10 day Jones Act exemption

The 10 day exemption to the cabotage laws that was granted by the United States government concludes on Saturday without the arrival of any ships beyond those that usually dock in Puerto Rico.

This was the information provided to the director of Port Authority, Omar Marrero, by the president of the Shippers. “We haven’t received any [international] ships as a result of the temporary exemption that was conceded,” informed the official to Caribbean Business.

Marrero explained that this could be an indication that all supply needs were duly met by the ships that normally operate on the island or that there wasn’t enough time to perform the necessary coordination for the exemption to have a real benefit.

The exemption allowed Puerto Rico to not only receive ships from the United States but also vessels registered in any other country or directly from any foreign port. The 1917 Jones Act requires that all merchandise shipped between the US and Puerto Rico be transported on American made and operated ships. The Virgin Islands are exempt from these statutes.

“This is crucial, particularly for gasoline. One of the immediate priorities is to have fuel, gasoline, diesel, for all of the island. For now we have enough, but we are limited by transportation logistics. At some point, getting enough gasoline on the island will be a problem, particularly in order to continue the principle functions of telecommunications, hospitals, drinking water and to function adequately,” the governor Ricardo Rosselló said when he announced the request to the federal government on Sept. 27.

Marrero pointed out that “this is the first time we have had an exemption of this nature—without any restrictions—which is also why we can probably conclude that we didn’t have enough time to see results.”

The official expressed that if Puerto Rico wants to request the total elimination of the cabotage provisions, a deep analysis of the results of these 10 days is necessary.

“The evaluation is important if we want to ask Congress for a permanent exemption from these laws. For that analysis it would be important to have at the table all entities with a stake in this topic in order to do a more complex evaluation,” Marrero said.

“The petition made by the governor was based on having an additional tool. At the moment and at the historic juncture where we are, we wanted to have all possible tools available; and it’s better to have those tools and not need them, than to need them and not have them,” he added.

It took 3 days for the port of San Juan to be able to receive merchant vessels after the hurricane. The first ships that arrived were those that were already on their way to the island before the storm hit. As the days passed, it became evident that there was a problem with transporting merchandise because of damages to supply distributors and issues with the distribution of diesel. This caused such a back log of containers that the government had to request the distributors and companies lift their containers or they would be bought by the State to be distributed.

At this point, 16 days after the hurricane, 1143 shipping containers were dispatch, versus the 1,400 the port of San Juan usually handles. Marrero informed that, with the exception of Mayagüez, all the island’s ports are already open.

N.Y. Gov. Cuomo, Congresswoman Velázquez bring help to Puerto Rico

SAN JUAN — New York Gov. Andrew Cuomo and Congresswoman Nydia Velázquez (D-N.Y.) arrived to Puerto Rico on Friday, with a shipment of generators, blankets, food, clots and other resources, as part of their efforts to help the island recover from Hurricane Maria. They both vowed more resources are on their way.

“The New York-Puerto Rico connection is so strong, they don’t even have to ask us for help […] We are family, you do not have to call the family for help,” said Cuomo, who came to the island with her daughter.

“It’s going to be a long road and it’s going to be a difficult road. We will be with you at every step,” he added, while announcing that additional shipments from the Empire State can be expected, with food, water and manpower to assess damages and help in the recovery efforts.

As for Velázquez, a Puerto Rican, she will push in Congress for a one-year waiver for the island from the cabotage restrictions under the Jones Act. She will also lobby for additional disaster relief funds for both the commonwealth and the U.S. Virgin Islands, which were also affected by Hurricane María.

Puerto Rico gov’t extends until Sunday curfew, dry law

“Gov. Rosselló has done an incredible job,” noted the congresswoman about the Puerto Rico governor’s job in managing the emergency which left thousands of houses destroyed, more than 15,000 refugees and six confirmed deaths as of this writing.

The governor and congresswoman of New York arrived Friday in Puerto Rico, and accompanied Gov. Rosselló during damage-assessment efforts during the day. Cuomo and Velázquez said the state is in a position to provide all the necessary assistance, not only with supplies and emergency brigades , but also with resources to restore the battered energy system.

“The Puerto Rican diaspora, our heart is with you. We will use all our resources, our political power in Washington [D.C.] to put pressure for Puerto Rico to be allocated the funds it needs,” said Velázquez.

Gov. Cuomo also called on the federal government to provide the necessary funding to the Puerto Rico government, which must have enough flexibility in determining its use, according to the governor.

Gov. Rosselló thanked the New York delegation for the help provided and for being “a friend of Puerto Rico since Day 1.”

A total of 54 towns were already declared as disaster areas by U.S. President Donald Trump, which allowed residents of affected areas to seek aid from the Federal Emergency Management Agency (FEMA). The federal agency, among others, is also assisting the commonwealth government with resources and in recovery efforts.

Caribbean Business reporter Cindy Burgos contributed to this story.

Puerto Rico Air Cargo Industry Could Take Off

Think about the possibilities. If Puerto Rico were included in a two-paragraph amendment to the 2003 Century of Aviation Reauthorization Act, its airports would be able to tap into cargo-growth opportunities and become a major cargo hub in the Caribbean and Latin American region.

Puerto Rico virtually sits on a gold mine but can barely do anything to extract its benefits. Until 2004, it was illegal in the United States for foreign carriers to exchange cargo among their own fleet or to transfer cargo among different carriers while on U.S. soil because those rights are preserved for U.S.-flagged carriers. However, that year an amendment sponsored by then-Sen. Ted Stevens (R-Alaska) allowed cargo transfers in Hawaii and Alaska.

(File Photo)

Efforts that began last year to have Puerto Rico exempted from air cabotage regulations have all but failed. Congress has ignored pleas made last year by different groups to a congressional task force in charge of developing economic-growth initiatives for this exemption. A Puerto Rico House resolution that would order the Ports Authority to begin lobbying efforts to have the island exempted from air cabotage laws has been in limbo since February.

While the exemption must be renewed every two years, it is understood that it will not be vacated for the foreseeable future.

According to news reports, the airport in Anchorage, Alaska was the fifth-busiest cargo airport in the world over the past year, according to Airports Council International, with nearly 2.5 million metric tons of freight landing at the airport. The airport charges thousands of dollars in landing fees that have brought millions to the economy because it receives flights from China and other Asian countries.

Jerónimo Lectora, of Jerónimo Lectora & Associates, noted in December in a statement to Congress that Puerto Rico shares important similarities with Alaska regarding the air cargo industry, which justifies the application of the Stevens amendment to Puerto Rico.

“Both [locations] are geographically isolated from the mainland [U.S.]; therefore, both are heavily dependent on air transportation. Both have an important strategic location that is ideal for an international air cargo hub. But, prior to 2004, Alaska could not fully utilize its geographic location to its advantage because most cargo flights were overflying the state, which is what is happening right now in Puerto Rico,” he said.

Except for pharmaceutical shipments, the island does not produce significant amounts of air cargo. Consequently, Puerto Rico does not attract enough international flights to help develop the island as an international cargo hub, he said.

While modern planes can fly farther without stops to refuel, cargo planes have to achieve a balance between carrying more fuel to fly farther with less cargo or carrying less fuel to fly shorter distances with more cargo.

Therefore, it is important for a cargo plane to have a site strategically located to refuel and carry more revenue-producing cargo, he said.

Right now, Puerto Rico confronts competition from airports in Colombia and the Dominican Republic that attract more international flights in the region. He said the air cargo industry benefits both nations’ tourism industries. The Stevens amendment leveled the playing field for Alaska against competing airports, making that state more attractive to domestic and foreign air cargo carriers for refueling and transfers, he said in a statement to Congress.

Tom Vicent, vice president of Prime Air Corp., said during an activity at the P.R. Manufacturers Association (PRMA) Convention that a cargo plane going from Germany to Brazil could stop in Puerto Rico to refuel as well as exchange cargo. “This is a golden opportunity for Puerto Rico,” he said.

While members of the PRMA believe it would be difficult for the U.S. House resolution to yield any results, they put their faith in private-sector lobbyists and P.R. Resident Commissioner Jenniffer González to include the island in the Stevens amendment.

Ferrer Proposes Amending Air Cabotage Law

SAN JUAN – Resident commissioner candidate Héctor Ferrer said Tuesday that among his projects, if elected, is a proposal to amend the federal air cabotage law to exclude Puerto Rico.

The air cabotage law prohibits the transportation of people, property or mail for compensation or hire between points of the U.S. in a foreign civil aircraft.

Ferrer said that at the federal level, there is a precedent with the case of Alaska, which is exempt from said law.

The Popular Democratic Party (PDP) politician stated that the new benefit, if approved, would apply only to the Aguadilla airport, which has the facilities to manage a great volume of cargo, and various companies operate out of it. He then added that if approved by the federal government, the proposal would allow for the establishment of new industries that would create employment opportunities and inject new money into the economy.

hector ferrer

PDP candidate for resident commissioner Héctor Ferrer

“In Alaska, that tax benefit has helped a lot in the establishment of new companies and the subsequent creation of job opportunities,” Ferrer said in a press conference at (PDP) headquarters in Puerta de Tierra.

The candidate for resident commissioner explained that his proposal contrasts greatly with his New Progressive Party (NPP) rival for the position, Jenniffer González, who has dedicated her campaign to promoting statehood as a solution to the economic problems in Puerto Rico.

Ferrer went on to add that he present his proposal to private sector entrepreneurs and that they have been receptive to it.

“The government has to incentivize the industry again to encourage the creation of new and good job opportunities,” stated Ferrer while expressing confidence in his proposal being taken up by the federal government, which he said wouldn’t cost it a single dollar.